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20 Nov 2013

BSA: Government Should Incentivise Saving Into ISAs

The British government should support savers when they save into their first individual savings account (ISA) as a means to promote saving among people who have never done it before, according to the Building Societies Association (BSA).

The suggestion was presented as part of a broader proposal for reforms that the government should implement to encourage saving. The BSA thinks the government should add money depending on the amount saved in the first year of saving into an ISA, for instance matching 50p for every pound saved, the association said in a statement, reported by The Telegraph.

Speaking at the association´s annual lunch, BSA chairman David Cutter said that a savings culture should be established and nurtured in the long term because savings is the core of the entire lending system. He called on the Chancellor to include the reforms in his Autumn Statement, which is due to be read on 5 December.

As part of the BSA proposal, Cutter called on the government to raise the cash ISA cap so that it equals the limit on stocks and shares ISAs. The government should also allow savers to transfer money from stocks and shares ISAs to cash ISAs, and from child trust funds to junior ISAs.

The BSA also commented that the Funding for Lending Scheme has certainly had a positive effect on the credit cycle, and it also affected the returns for savers that depended on cash deposits.

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